Dealmaker: Summit Hotel Properties Buys Five Hotels for $163M

Summit Hotel Properties, Austin, Texas, purchased an 812-guestroom, five-hotel portfolio from Xenia Hotels & Resorts, Orlando, Fla., for $163 million, or nearly $201,000 per key.

The portfolio included the 203-guestroom Courtyard Fort Worth Downtown/Blackstone, the 123-guestroom Courtyard Kansas City Country Club Plaza, the 182-guestroom Courtyard Pittsburgh Downtown, the 116-guestroom Hampton Inn & Suites Baltimore Inner Harbor and the 188-guestroom Residence Inn Baltimore Downtown/Inner Harbor.

The purchase price represented an 11.1x multiple on the hotels’ combined earnings before interest, taxes, depreciation and amortization as of April. The portfolio achieved RevPAR exceeding $115 during April.

Summit Chairman, President and CEO Daniel Hansen said the acquisition aligns with the real estate investment trust’s plan to acquire premium-branded upscale hotels with efficient operating models in geographically diverse markets. “All five of these hotels are located in prime locations in strong markets and exhibit many of the upside characteristics that are important to our investment criteria,” he said.

Hansen said Summit will execute new franchise agreements with the respective franchisors for the hotels and expects to spend $13 to $16 million in capital improvements over the next two years.

In a separate transaction, Summit Hotel Properties acquired the 181-guestroom Courtyard by Marriott Charlotte City Center in Charlotte, N.C., for $56.3 million.

The company predicted an 8.3 percent capitalization rate based on the hotel’s net operating income during the first year of ownership. For the twelve months ended March 31 the property had revenue per available room of $129.

Summit’s portfolio now includes 81 hotels totaling 11,608 guestrooms in 24 states.

After this disposition, Xenia Hotels & Resorts owns 37 hotels with 10,783 guestrooms in 18 states and the District of Columbia.